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Reuters in Beijing

Wednesday, 06 May, 2015, 6:53am

China has put in place rules to protect private investors and expand opportunities in infrastructure and utility projects, the country’s top planning agency said yesterday, in an effort to revitalise the economy.

To encourage private investors the National Development and Reform Commission has opened up some major infrastructure projects that had been off-limits, officials said.

Private investors can build projects in energy, transport, water and environmental protection and urban utilities through franchises, according to rules issued by the planning agency.

Contracts would be based on build-operate-transfer models. The planning agency pledged to “protect the legal interests of social capital and guarantee stability and continuity of franchising operations”.

The government will encourage banks to provide syndicated loans for such franchise projects, and let policy banks offer “differentiated” credit support, including loans of up to 30 years, according to the rules due to take effect from June 1.

The projects will be allowed to raise funds via private equity, strategic investment and bonds.

Private investment is being encouraged as local governments are saddled with debts run up during a state-led stimulus after the global financial crisis.

The government is looking for ways to lift the economy, as growth slowed to a six-year low of 7 per cent in the first quarter and surveys indicate continued weakness into the second.